Tariffs Driving Some Production Back To China: Volvo CEO

of the country is currently the l A Auto Show. Uh. And there is Volvo and they did not bring a car this year to the auto show to display. Hokan Samuelson, who is the chief executive officer of Volvo, joins us now from there. Thank you so much for joining us. So why didn't you want to display a car and what does it mean to have a concept car? Uh? Okay,

nice being with you. We really see that maybe the times when you show the car foot of the clothes in front of an audience, it feels a bit outdated, especially as the core of the future will have a lot more than just the hardware. So we decided, then let's focus on on those new customer experiences instead of the hardware and then maybe not deluse the message. Let's

take the car out. So we have here one station we talked about in care importainment system of the future where we have a partnership with the Google bringing in the Android in the car. Another interesting example of a connectivity services with Amazon. We have people from Amazon. You're showing how you can get your Internet supply directly into your car because normally you're not that home when they come to deliver the stuff. So that's the practical solution

also for our for our customers. So these are two examples of what the care of the future could could be. Besides and of course a nice car. Can you tell us a little bit about the three sixty C This is the concept car that Lisa was referring to, and the venture that you have with Luminar, and how the technology that Luminar is pursuing with you is really going

to change the in car experience. And I have a feeling that you'll even be able to have a glass of champagne while you're in the car and it won't it won't be a danger. Okay, it's a really good point because of course, to be able to enjoy any type of in car portayment or you need to have a car which of course could be driven safely automated.

And that's where luminar comes in to the picture. I mean, that's a very interesting start top that we have also on stand here, which is a long range high definition light art. So it's really as with the human the ability to see. It's crucial for a stage drive, and I mean the computer also needs a better revision. It has cameras, radars, but also light darts. And then the lider is especially important, and the gluminar is taking a

step forward here of having a long range, high definition lider. Okay, I have to think, you know, you're talking about the experience and there seems to be a d emphasis of actually purchasing the vehicle, and perhaps this is what's behind General Motors in the recent announcement they came out with to cut a huge proportion of their staff in response to changes in automation and electronification as well as just the reality which is the car cycle is slowing. What's

about on it that? Uh, we don't really see a a indication of the weaker market so far. I mean we have been very fortunate with our new car lines and we have the right cars being now popular on the on the on the market SUVs. We have three quarter of our stays is already today a SUVs, but the last quarter is also very important. And we have a very attractive new car being built in South Carolina. I knew said on so I think there will it will not be one under present SUVs. There will be

awesome market for for other cars. So we are fortunate to have a strong product lineup and we can then of course continue growing our market share and that will help us. And and we are lucky than to be small. Not always good to be big. Sometimes it's also an advantage being small because the teacher to grow. Then, Okay, I'm wondering if you could just talk a little bit about producing cars in the US versus the rest of

the world and sort of the competitive balance there. I mean, do you find it to be prohibitively expensive to expand production in the United States versus say, China. Yeah, I mean with no carrorists between China and and the U s that ha's of course complicated using a sort of exchange system between these two markets. We we were planning really to build a big sead on in China and important in to continue importing it into US, which we

have been doing for some years. And then the one built in South Carolina was intended to go the other way. But of course with very high carrifts, we have to be able, we have to react to that. So right now we're planning to build the car we're building in South Carolina also in China because will be too expensive paying the twenty five percent importunities. But still I say, we have mitigated these new tariffs so far, so bye bye, and we were led to have the factory in the US.

But I mean if it would continue then of course would be really a big drawback for I think all all car makers, if for also US and and US would introduce high tarriffs and that would be at the end more expensive cards for the consumer. I think they are the ones who will be paying the bill. Let

them thanks very much for being with us. How can Samuelson, chief executive officer of Volvo and joining us from the l A automobile show And I don't think it's going to be an automobile show anymore, at least I think it's just going to be a technology show the way it's going. Yeah, Well, honestly, it's interesting to me. The focus on the practical experience. How to download your music, your audiobooks, you know, how do you create an use

those systems? Right, exactly, and that if becomes tutorial exactly that in tech Indeed, all right, you're listening to blue Berg Markets. We are broadcasting from the Bloomberg Year Ahead Summit at Bloomberg World headquarters. We are so lucky to be joined by Franz Bueller, his president and chief executive officer of Aho Delis, which is based in the nether Lends, but he joins us here at our headquarters. Um this brand is the owner of staff in Shop, peep, Had

Food Line, Giant and Hannaford. So right now, do you view trade as potentially the biggest threat to your business or technological changes that you need to keep up with. Yeah, that's for sure. The market is still very competitive and it will also remain the same in the next year.

And you see that technology is going to have a big impact on industry for sure, to making customer journey even more attractive, to make it easier for customers to prepare the shop to predict their list, but also to give them more information on all kinds of things like food and navigation nounhealthier choices for food. So I think technology will be is going to play a big role.

Another thing what's going to be an important thing on technology is the whole food provenance and we just had the romaine lettuce uh scare in the US a big thing, and I think more and more people talk about technology like blockchain to make sure that if the full supply

chain visible. And the third thing on technology is that if you look at at labor in general, um, there's a lot of things in the supply chain of retailers or where we can gain efficiencies with the more automation, more robotiz robotization of warehouses and these kind of things. So technology will be in a very important factors for the coming years. Are you also looking to shrink the

actual size of the grocery store make it smaller? I think what we can see is that that online will have an impact on the bigger stores, but we use that space to have even more and stronger fresh parameter in those stores, to do more in organic, to do more in fresh food, and to have better offers UM. And at the same time, we also operate the smaller convenience stores, and we have a lot of them in Europe, of course, and I think there's also potential in the

US to operate smaller stores, smaller supermarkets. So you were speaking to a publication earlier this month and you said that your company is in a good position for US mergers and acquisitions. What kinds of companies are you thinking about and how how quickly WI let's play out? Yeah, we UM we launched two weeks ago. This is leading together strategy UM where growth is very important, but also

non organic growth, which is an opportunity. And if you just stick to the US on the East Coast, I think that we will see in further consolidation on the East Coast where a lot of companies cannot make up let's say, what the investments they have to make in technology and online and these kind of things, so that

we have further consolidation. And with the branch you just mentioned where we are very proud about, we think that we can deepen our footprint along the whole East Coast by filling acquisitions or if we have other targets coming up, then we would be interested and the names. No, no, there's no no names at the moment. And you know everything about for looking statements. Speak a little bit if you can about in store dining and also the takeaway

prepared food business. I think that's a great question. You see that more and more customers are looking for meal solutions and or to save time, or to get inspiration or to have in a very healthy proposition. But take it out and uh, and in store dining is part of this. We have now a lot of stores where we have kitchens inside where people can consume their meals. We have more and more investments in meal solutions, if it's very nice salads, if it's unique meals with a

very healthy proposition. So I think that whole uh, what you call out of home meal solutions, that whole field is going to blur also with the supermarkets and and and the restaurants. I think that will be in a common space we call it that we would have to gain our share of stomach irrespectively where that beautiful meal is coming from. What does that say to him about our delayed gratification ability that we need to see food

and consume it immediately. I'm curious, just you're talking about scale, and I have to wonder how important Amazon and Walmart are to the sort of pressure and race to advance sufficiently technologically. I mean, are you finding it increasingly difficult to compete given their scale? Um also a good question. But if we look at scale for us, it's a relative market share important in the markets where we operate.

We have number one and two positions in all the markets along the East coast from Bangor in Maine to to u to the southern part of of the Carolinas. And it's about local scale, so local market share, and we connect them with a great local branch you just mentioned. And we believe that a strong local market share combined with brand strength is that that in an omnique channelso stores an online proposition together that is the strong company

proposition for customers. And with our fortified billion dollars of of of sales, we have very strong positions and therefore the necessary scale. Your online sales growth was a big bright spot in the third quarter earnings results. In some cases up nearly will be spending more money to build that out. Yeah, we see that. We believe that consumers love a proposition where you have a bricks and mortars or store proposition linked and augmented with an online proposition

um and we grow quite fast. We also will accelerate our growth in the US with people digital apps, and for next year we see there also growth. A lot of people talk about growth in online and magnificent figures everywhere. We should realize that we are only in the food business and fresh food and frozen food and chilled food. There's a very different game than than selling refrigerators, electronics, books and c d s and uh. And that's why

dead growth is not easy to make. And with a one billion dollars at the moment, we are still leader on the East Coast in food online twenty seconds or less. I'm just wondering, do you think that Amazon has been successful so far integrating Whole Foods. I don't know. They don't give me their boardroom reports on this, but I think they don't. Have you asked? I would love to ask them, but I think the answer prompt But they have You know, you know that our whole has check

out what they call checkout free stores. Yes, well we have it. We have a lot of technology there, so I'm not afraid of the technology we we we are doing already amazing things in the US and in Europe, but also on Amazon. Will see that fresh food looking at Amazon Fresh. That is a difficult turf to be very successful, and we have roughlyan hunter and thirty years experience with food. Thanks very much for being with us. Much appreciate it gets us already and hungry for lunch France.

Muller is the president and the chief executive of our whole Del Hayes. I gotta say the late gratification that is totally me an inability to do it. You're listening to Bloomberg Radio. Healthcare is an area right for disruption. Amazon is trying to do just that. Reported today in the Wall Street Journal, they are starting to sell software that minds patient medical records for information that doctors and

hospitals can use to improve treatment. Joining us now is Lloyd Biner, Dean of the Stanford University School of Medicine. We are so pleased to have you. Uh Dr, I'm just curious from your perspective, is what Amazon doing exactly what you're talking about in terms of modernizing healthcare and

using big data and the lessons therein to help patients. Yes, I think, uh it's It's certainly one example of how gleaning information from the massive amounts of data that exists within electronic medical records, how that opers offers the opportunity

to really improve the delivery of healthcare. You know, in order to really have individual lies, personalized healthcare, we have to look at the results and the outcomes from thousands and thousands of patients, uh in order to know what the evidence would suggest is the best treatment and prevention

for disease in an individual patient. And I think what I also read this morning in the Wall Street Journal that Amazon is moving forward with is a step in that direction, and I'm sure that other major tech firms and cloud storage platforms are going to be interested in the same sorts of topics. The limitation for getting information from healthcare data today is not the AI or the algorithms, or the ability to do deep learning and neural network

type approaches. Those are not the limiting factors. The limiting factors being able to bring the get data together in a way that those techniques of deep learning can be applied in a meaningful way. Dr Minor, I'm sure you've seen all of the charts and comparisons in terms of how much per capita the United States spends on healthcare.

What is your thought about why do we spend more than any other developed country and we don't necessarily live longer or any better than the citizens of Switzerland, Germany, the Netherlands and so on. Why do we spend such an outsized amount in two minutes or less? Right? Clearly, Uh, there there are lots of factors. Certainly the payment system

IS is one prominent factor. Um. You know, moving more towards value based reimbursement IS is something that I think we have begun to the United States, but clearly we need to continue along that pathway. In a strictly fee for service world, it becomes difficult to align the incentives, which should be based upon outcomes, that is, achieving the best health care outcomes with the payments. I mean, that's the way any any sort of economy works, uh, when

it work as well. So that's been a challenge in the United States. Also, we focused far too much on the latter stages of illness. We need to focus a lot more on prediction and prevention, and that's really been our goal. Uh. In Stanford Medicine, we define our strategic initiative as being precision health. We distinguish that from precision medicine. And then we also want to focus great science, great technology on prediction and prevention in addition to of course

achieving the cures for those complex diseases. But we ought to be much more focused across the board on being better at prediction and prevention. That will reduce the demands on the system, because so much of the healthcare expenditures in the United States has spent in the most complex diseases and in the latter stages of life. So I

want you to look into the future. The topic of your panel that's upcoming is the future of healthcare, and you envision a world where we have holographic m r s and scans and such so that radiologists can more accurately understand what's going on. Tell us about how close we are to the future. You would like to see

at some of the features of that future. I think the advances and we started the discussion today talking about getting information from huge sources of data, so broadly speaking, under the heading of digital health, both the data mining aspects as well as the consumer focused devices and technologies, those offer remarkable opportunity to democratize healthcare delivery. You know, last year are a group of computer scientists at Stanford

working with our dermatologists. Using a large database of images of skin lesions taken with smartphones, we're able to develop a deep learning based algorithm that can make a diagnosis of a skin lesion as accurately from this algorithm as a trained dermatologist. Now, that has a remarkable Now that not every community has a dermatologist, and by the way, in the communities that have dermatologists, you can't always get

an appointment. But but and that's one example of many, many others of how we can use the same type of disruptors that have been so impactful and financial services in ordering goods and services and apply those to healthcare. All Right, So, how is privacy an obstacle here? Because I would imagine people are concerned that some of the big tech companies are gleaning all the information from everything

they do on their phones. Anyway, if they start taking images and sort of connecting their health with their devices that follow them around, how does that play out? Sure, privacy is absolutely a concern. I think the key The first step is transparency, so people have to know how their data is going to be used. In the Wall Street Journal report that you and I both read this morning, it mentioned that Amazon furnishes a key that can only be opened or used by the institution that that has

obtained the data. I know words Amazon will never access. According to the report, the individuals uh that whose data formed the basis of the deep learning process. You know, that's a first step, but there are lots of other

steps that have to be taken as well. I would hope that as we have this dialogue based upon transparency, based upon really all of us in society understanding the opportunity that these approaches offered to improve healthcare, I would hope that each of us as an individual will become more comfortable with how our data will be used, because that's the only way we're really going to improve the delivery of healthcare. Now, we just learned that CVS has

completed its acquisition of Ethna. What's your position, based on your experience as a medical professional, this combination between pharmacy benefit management corporations, regular pharmacies, and health insurers. I think the CVS at A merger is representative of a broader trend of consolidation in the healthcare market. In the country today. You know, there can be economies of scale and efficiencies

from consolidation. There can also be concerns about UM about how the competitive drive and the UH sort of individual delivery systems and the innovation that comes from that, how that might be affected by massive consolidation with CVS and

Etna and with other similar types of arrangements. What I see is a desire to build truly vertically integrated delivery systems, so where you and I, as as healthcare consumers, have everything covered under one umbrella, and that includes being able to get our prescriptions, uh under a comprehensive integrated plan.

All right, thanks very much for being with us. Dr Lloyd Minor is the dean of Stanford University's School of Medicine, and he is here at the Bloomberg The Year Ahead conference talking about the future of healthcare and healthcare delivery. Fascinating discussion. I love the do you have being able to take a picture of something that concerns you and having Dr Googleberg give me an answer. Yeah, while you're in your autonomous driving vehicle drinking some champagne. This is Bloomberg. Today.

CBS Health has closed it's seventy billion dollar deal to purchase the health insurer ETNA. Here to tell us more about the world of healthcare. Michael Ray, Founder, chief executive are Ex Savings Solutions. Michael, thank you very much for being with us. We've been waiting for this deal to close for many months. Do you think this is going to really transform the way healthcare is delivered to Americans? No?

I do not, UM, I think that really what you see here is a combination of two companies in the healthcare space, one that handled, you know, strictly pharmacy benefits and one that handled underwrote risk on the health insurer side. I don't expect the consumer experience to change. I don't expect costs to change because of it. Um. I really just think it's it's kind of a combination and a

new brand. Michael. One thing that possibly could change the landscape is the fact that big corporations are sort of taking things into their own hands. We've talked about, for example, h Berkshire Hathaway teaming up with JP Morgan and others to create their own health network. UM. But you're seeing it also with your own company, right, Yes, we are so.

We recently signed a deal with the health Print Health Transformation Alliance the h t A, which is a combination of about fifty companies American Express, Coke UM, some of the some of the really large large players represents about six million lives and they have really formed this coalition to try to, to your point, take take things into their own hands and actually start to exert some of their own influence on what decisions are made and and

how how consumers navigate the space. So, is the consequence for this potentially lowering the insurance costs for the companies or is it having collective pressure on the drug makers to lower prices. Yeah, it's gonna be both. So when a market is efficient when information flows freely. The idea is that when information is shared between the companies and also when consumers have more information, they can navigate the healthcare space like they do in every other facet of

their life. That makes wiser decisions and lower prices. Is there any empirical evidence to support that. Absolutely. So. We have a number of case study clients, some one fifty thousand life group that uh we had a four to one r o I and under fifteen months. It is determined by how consumers navigate and begin to use tools and that comes down to marketing and how they're positioned. But at the end of the day, um, you know,

there's a lot of ideas in the market. When you can actually produce our O, I that that's meaningful in the world we live in. So, Michael, I think the last time we talked was before the mid term elections. We've gotten the midterm elections results. The Democrats took the House. I'm just wondering what this means in terms of political pressure on reducing pharmaceutical drug prices. Well, it's everyone agrees,

it's a it's a populist uh you know item. Everyone agrees that they want drug prices to go down, at least in their in their speaking uh you know, speeches. But I don't expect anything to to actually change. Um. You see it. There are too many market forces, too many strong lobbies. You've got a you know, Republican Senate in a in a Democratic House for starters. Um. So there may be small, small things like the gag clause

was recently removed. Um, that's a very minor win. But everyone will hold onto it and and make sure that everyone knows, you know, during the next election cycle. But really transformational change is going to be tough to come by. Is transformational change stymied by the fact that Medicare and Medicaid do not negotiate. Yes, so this is all at the march, and this has nothing I mean, it's like saying, you biggest customer has no say in the cost of

the product or service that they're buying. Correct, And I you know, so that there was a very bad deal made a while back on this and unfortunately we're living with the consequences. And and some of these drug companies have free reign. When they have, you know, a market essentially cornered, they can make the price whatever they want,

get coverage and it costs taxpayers money. Okay, So this goes back to what you're working on currently, getting a number of big companies, including IBM, veries in an American Express together UH to try to share pricing information with their with their employees and exert their own pressure. If all of the companies, the big corporations in the United States joined forces and did some sort of thing like this,

could that be enough. My belief is yes. My belief is that that is the that is the single best bet to make, whether it's our company or another company that's fulfilling that need. Uh. The market has to be able to vote. It has kept markets in check in every other industry, and we have to believe that if if consumers understand what their decisions are, what their options are, they can make better decisions and that will regulate a market. Will we see an end to tax credits for orphan drugs? Um?

I don't think so. No, And and and I'm not necessarily opposed to those Um. There are some some disease states that deserve those dollars in my opinion. Um, but

I don't think that they'll go away. So to the point that you were just talking about, if you could just give us a little bit of a sense of what your platform does and whether you actually see that happening, whether big corporations are accelerating their move into taking control of healthcare costs themselves enough that there actually could be

some kind of reduction intro process. Yeah. So big corporations target for example, UM, you know they're on the hook for to pay a lot of money on the back side of a pharmacy claim aime. Um. The thought is, though, if they can empower their consumers to understand when they're at the doctor's office or even after. If they're trying to treat blood pressure, there might be ten different agents

they could use. Um each of those agents have different prices depending on the pharmacy that is that has chosen. If you can distill that complex information down into something that's simple for consumers to understand, they can make choices at that point and pick the lowest cost pharmacy the lowest cost drug and not have anyone telling them what to do. People naturally resist when they're forced to make a you know, to make a decision that the third

party wants. We don't have that bias. We don't care which one they picked. We just want them to know that the options, and like you would expect the time, they pick the lowest price pharmacy and the lowest price drug. Michael, whenever I meet anyone who comes to visit the United States, particularly from Europe, may talk about the health care system

and the single payer options that exist in Europe. They ask one question, how do you live with the anxiety and stress and complexity of healthcare in the United States? Is there any evidence to suggest that single payer would be a way to go? And pencil you ask highly charged question UM, yeah, there there is. You know, there's some efficiencies and there are rules that are put in place to control things like drug pricing in Europe, and

those things absolutely can have a big effect. We were just talking before this, and you know it, there is high anxiety to be sick in America and and that goes for sick people and healthy people. Nobody wants that to be them because you don't know what you're going to be exposed to. UM, So it there's anxiety. UM You're gonna need people to administer those benefits either way,

whether it's a single payer of multiple players. Unfortunately, I don't think it's gonna it's gonna happen in the near future. Michael right, Thank you so much for being with us. Michael Ray is founder in chief executive officer of Our Saving Solutions, based in over Limp Park, Kansas, but joining us here at our thirty Lexington headquarters. Do Not Get Sick. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,

or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Bloomberg Radio